REVIEWER for GENMATH 2ND GRADING PERIODICAL EXAMINATION

I. DEFINITION OF TERMS

INTEREST - It is a fraction or percentage being imputed or charged to a sum of money. PRINCIPAL - It is the sum of money that someone borrows or lends.

RATE - It is the percentage of increase of the investment charged by the lender.

TIME - It is the period or how long the money is borrowed or invested, usually in years.

FUTURE VALUE - It is the sum of principal and its interest.

It is the sum of all the payments to be made during the entire term of an annuity. SIMPLE INTEREST - It is essentially the interest charged to a borrower or earned by a lender for

the full term of the loan. COMPOUND INTEREST – It is a type of interest where the interest charged or earned is being

rolled-over and reinvested with the principal amount. ANNUITY – It is a sequence of payments made at fixed intervals or periods of time

SIMPLE ANNUITY - A type of annuity where the compounding of interest and payment periods

happen at the same time. BORROWER - It is the person or institution who owes the money or avails of the funds of the

lender. COLLATERAL – It is a valuable asset of a borrower that is pledged as a security for a loan.

STOCKS - It is defined as shares of ownership in a corporation.

STOCKHOLDER - They are defined as buyers of stock issued by corporations, also known as

shareholder. COMMON STOCKHOLDER – It is a type of stockholder wherein he or she has voting rights in

choosing the company’s board of directors.

PHILIPPINE STOCK EXCHANGE – It is the largest stock market in the Philippines. DIVIDEND – It is defined as the portion of the company’s earnings that are distributed among its

stockholders. a. SCRIP – It is a type of dividend issues a promissory note to pay its stockholders at a specific

date. b. STOCK – It is a type of dividend issues more shares of stocks to stockholders instead of paying

in cash. c. CASH – It is a type of dividend issues portion of earnings paid out to stockholders; most

common. d. BONUS – It is a type of dividend made in the form of additional shares rather than a cash

payout. e. OPTIONAL – It is a type of dividend that a stockholder can choose to take as either cash or

stock. f. PROPERTY – It is a type of dividend wherein a company issues a nonmonetary dividend or

property to its stockholders, aside from paying cash or more shares of stock.

BONDS - A bond is a debt investment in which an investor loans money to an entity (typically

corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. a. CORPORATE – It is a type of bond issued by corporations such as banking sector and real

estates. b. TREASURY – It is issued by the government to finance its budget deficits.

c. CALLABLE - It is also known as "redeemable bonds," can be redeemed by the issuer prior

to maturity. Usually a premium is paid to the bond owner when the bond is called. d. SECURED – It is a type of bond that is secured by the issuer's pledge of a specific asset,

which is a form of collateral on the loan. e. UNSECURED – It is a type of bond with no collateral.

ISSUER – He is the one who borrows money from investors by issuing bonds

BUREAU OF TREASURY – It is a government office known as largest issuer of bonds in the

Philippines.

II. FORMULAS

1. SIMPLE INTEREST

𝑰 = 𝑷 × 𝑹 × 𝑻 WHERE: I – Simple Interest P – Principal Amount/Present Value R – Rate T – Time

𝑭 = 𝑷 (𝟏 + 𝑹𝑻) WHERE: F – Future Value/Final Amount P – Present Value/Principal Amount R – Rate T – Time

𝑷 = 𝑭

𝟏 + 𝑹𝑻

WHERE:

P – Present Value F – Future Value R – Rate T – Time

2. COMPOUND INTEREST

𝑭 = 𝑷 (𝟏 +𝑹

𝑵)

𝑵𝑻

WHERE: F – Future value P – Present value N – No. of times the interest is compounded per year T – Time

3. SIMPLE ANNUITY

𝑭 = 𝑪 ((𝟏 + 𝒓)𝑵𝑻 − 𝟏

𝒓)

WHERE:

F – Future value C – Contribution/saving R – Rate N – No. Of times the interest is compounded per year

T – Time

r – 𝑅

𝑁